Search & Filtering
Suppose that the price of good A and Good B are birr 3and birr 2 respectively suppose aconsumer is spending his entire income for buying 4 units of A and 6 unit of B,and the marignal utility of both 4th unit of A and 6th unit of B is 6, is the consumer at his optimal position?
A. they should leave the output unchanged.
B. they should increse production.
C. they should decrease production.
D. they should shut down.
A. each participant is too small to affect the market price.
B. the price can be driven upward by suppliers holding back on goods and services.
C. government intervention is needed to ensure that price are fair for consumers.
D. there can be few or many buyers and sellers.
. Draw a production possibility frontier showing the trade-off between the production of apples and the production of oranges
suppose that the utility function of a consumer is given by TU(x,y)=3x2 y and the price of x and y are $1 and $2 per unit, respectively. if the income of the consumer is $600 and if he spends all of his income on the consumption of commodities of x and y, find the optimum amount of x and y that the consumer will consume at equilibrium and find MRTSx,y.
The Long-run production function is given by; Y = 180 L1.2 K1.8
Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt)
a) Calculate Marginal Product of Labour (MPL) and Marginal Product of Capital (MPK), if
L=12 and K=20 (05 Marks)
b) Derive the equation for Isoquent and graphically show it by assuming L= 10, 15, 20 25 and
30. (05 Marks)
c) Determine factor intensity and returns to scale of this production function. (05 Marks)
d) Prove that the elasticity of labour is 1.2 and elasticity of capital is 1.8 (05 Marks)
1. Suppose that the total utility function of a consumer is given by TU(x,y) = 3x2 y and the prices of X and Y are 1 Birr and 2 Birr per unit, respectively. If the income of the consumer is 600 Birr and if he spends all of his income on the consumption of commodities of X and Y, find the optimum amount of X and Y that the consumer will consume at equilibrium and find MRTSx,y.
If the government decided to provide the consumer a quantity subsidy of 5 birr on good X and ad valorem subsidy of 12% on consumption of good Y. Compute price elasticity of demand and supply at market equilibrium in A and B. Also comment on the nature of elasticities
the linear demand function is given below. Qd = β0 +β1Psh +β2M+β3Pcg+β4Ax+ β5C Where, Qd = deluxe room in S hotel Psh = Price of a deluxe room in S hotel (US$/room) = US$. 200.00 M = Visitors per capita income (US$/Day) = US$ 120 Pcg = Price of a deluxe room in C (US$/room) = US$. 150.00 Ax = in S hotel (US$/room) US$. 18.00 C = Customer Satisfaction Index = 8.56 The estimated computer output of the A above model under Least Square Method (LSM) is as follows, Dependent Variable: Q R- Square: 0.86 T table value 1.671 No of observations: 62 F- Ratio: 154.15 Variables Parameter Estimate Standard Error β0 127.8 49.6 β1 -1.3.0 0.42 β2 2.75 1.01 β3 2.55 1.21 β4 1.41 0.48 β5 1.85 0.23 a) Are estimated parameters comparable with economic theory? Explain b) Construct the TR function and determine the TR maximize demand b) What are the significant parameters that could be impact on the demand for a deluxe room in S hotel?
